Trade update: Is trade sustainable?

by Christian Siviere

What is sustainable trade? Consulting firm EY defines it as an exchange of goods that generates social and environmental benefits beyond the creation of economic value. It is meant to promote the preservation of natural resources and reduce poverty and inequality.

Christian Sivière runs Solimpex and is an international
trade consultant and lecturer.

christian.siviere@videotron.ca

Sustainability means meeting our own needs without compromising the ability of future generations to meet their own. Quite an ambitious goal, isn’t it?

Where the sustainability component of 2021’s international trade stands is hard to know, as we lack statistics for that, but our leading export remains energy products derived from fossil fuels, so this does not point in the right direction.

Meantime, let’s look at four areas where change could make a more sustainable future.

Electric vehicles

The EV pioneer Tesla has seen its value go through the roof. With stock market speculation, Tesla is worth as much as the combined market capitalization of the nine largest car manufacturers worldwide, including giants Volkswagen and Toyota, yet it makes up less than one percent of global car sales. Does that make sense?

Is it really sustainable to drive huge electric pick-up trucks or SUVs, rather than economical gas-powered Honda Civics? Do we need trucks or SUVs to drop-off our shirts at the dry-cleaner, then ferry us to the gym or the Tim Hortons line-up for a coffee? How about walking to the dry-cleaner, or make your own coffee and invest in a thermos?

It’s hard to believe, but in 2021, energy-guzzling pick-up trucks accounted for over 80 percent of total new vehicle sales in Canada, and the number is on the upswing. We are a huge country, but 82 percent of Canadians live in urban areas, so how many really need to drive around in huge pick-up trucks? And should we not support public transit instead of individual EVs?

E-commerce

Enabled by technology, low costs and little or no taxation, e-commerce has grown tremendously. During lockdowns, with many stores closed, it helped us continue to live more or less normally.

But we see its huge negative impact on society, with giants like Amazon becoming quasi-monopolies. According to several studies, for each job it creates, Amazon kills two to three jobs in brick-and-mortar retailers, suppliers and subcontractors. Online commerce puts more trucks on the road when we are already suffering a shortage of drivers, and creates wasteful packaging materials.

Its “free” shipping and “free” returns marketing entices customers to buy things they don’t need. The growth in fulfilment centres drives industrial real estate prices up, transforming pastures and wooded areas outside urban centres into concrete and asphalt deserts, partly financed by taxpayers through government subsidies. Is this sustainable?

Attitudes

We must become more conscious of the environmental and societal impact of our purchases. For example, this means buying from a local, physical store, where we can see the origin of a product and how far it travelled. Stop consuming coffee from single-use capsules; instead, buy real coffee and make it at home. The multinationals that make these capsules tell us they are sustainable, but only fools believe that.

Another example: toilet paper advertised as “green”, and packed in large green packages. Made in China from bamboo, it travels thousands of kilometres to reach us, clogging ships, ports, rail lines and roads, contributing to the rise in shipping rates. Who believes that this TP is “green”?

The right price

Ocean container transportation, the enabler of globalization, had become very cheap, making it worthwhile to move manufacturing to low-cost countries, then ship finished products across the globe.

It worked well until the pandemic distorted the market. A strong recovery, coupled with ocean carriers operating like cartels, drove rates through the ceiling.

But what is the right price to ship a container from China to Canada: US$2,000 or $10,000? From a consumer viewpoint, is it sustainable to pay less for a Costa Rican pineapple or a Mexican avocado than for a Canadian-grown apple?

Regulation versus virtue

Governments could regulate to make industry become more virtuous. But ordinary citizens and consumers have a role to play. Let’s become “smart” consumers, not by being glued to a so-called “smartphone” or living in the metaverse but by looking around, becoming better informed and more conscious and conscientious about sustainability.

This winter, did you shovel snow? Or did you use a stinky, noisy snow blower that contributes to CO2 emissions? Next fall, will you use a leaf blower or a hand rake? It’s up to you.

Luckily, we still have choices, but in a sustainable world, we must simply consume less.